The Gazetted Flare
Gas (Prevention of Waste and Pollution) Regulations 2018 recently
approved by His Excellency,
Muhammadu Buhari (GCFR), the President of
the Federal Republic of Nigeria provides a legal framework to support the
policy objectives of the Federal Government for the reduction of Green
House Gas (GHG) emissions through the flaring and venting of natural gas.

The Regulations provide the legal basis for the implementation of the
Nigerian Gas Flare Commercialisation Programme (NGFCP), introduces a new
payment regime (penalties) for gas flaring which adopts the “polluter pays”
principle and mimics a carbon tax. The regulations also imposes significant
obligations on producers and gas flare out projects for the reporting of data
in respect of activities related to gas flaring.

The objectives of these Regulations are:

The reduction of the
environmental and social impact caused by the flaring of natural gas;

Protection of the environment;

Prevention of waste of natural
resources; and

Creation of social and economic
benefits from gas flare capture.

As a synopsis, the thrust of the regulations is as follows:

Consistent with the Petroleum
Act, Government takes all Flare Gas free of cost at the Flare and without
payment of royalty;

All flares taken by the
government to be subject to competitive
bids;

Creates the Permit to Access Flare Gas with
right to enter Flare Site & take Flare Gas;

Compels the installation of
meters and the production and report of Flare Gas data;

Prohibits flaring and venting
of gas except further to a certificate issued by the Minister in limited
circumstances;

The current meagre flare
payments (penalties) of N10
per thousand standard cubic feet is increased, in the case
of any one producing 10,000
barrels of oil or more, to$2.0 USD per
thousand standard cubic feet of gas and, in the case of anyone producing
less than 10,000
barrels of oil per day, to $0.50 USD per thousand
standard cubic square feet of gas.

There are mandatory additional
payments by the producer of $2.50
USD for:

Failure to produce accurate
flare data.

Failure to provide access to
flares or flare sites

Failure to sign a Connection
Agreement;

In the event of continuous or
egregious breaches, there is a possibility of suspension of operations, or
a termination of the producer’s license.